Australian coal producers may be considering closing their mines because Chinese buyers are defaulting on thermal coal contracts.
China, the biggest user of coal, wants a lower price for the commodity and an analyst says until that’s negotiated, Australian thermal coal exporters won’t be able to sell their product.
James O’Connell from Platts Coal Report says Australian miners will have to make some tough decisions.
“In the next couple of months there’s definitely a possibility that if there’s not a hot summer in China, if coal burn goes down, their stockpiles are going to kick in, the exports from the United States are going to hurt Australian producers.
“They’re going to be in a position where they might have to consider closing down mines or at least temporary shut downs.
“In Australia, that’s an absolute possibility.” – ABC